Hottest Links: Africa’s Potential, Merger Rumors, And LoJack

Hottest links for Monday, April 7th, the late edition. Get our free daily newsletter and never miss a single linkfest. Also, now if you sign up you will get our new e-book on value investing.

Top stories for today are posted below. To kick off your work week, we’ve got a helpful flow chart that helps you determine what kind of IRA you need – just in time for tax season! – as well as a guide to merger rumors and how to sort out fact from fiction. At the bottom, you’ll also find a story about a man who died in a way that should definitely win the Darwin Awards.

Hottest Links: Stories

Value Investing

Your Investment Returns: Don’t Envy the Dows or the Joneses

Consider a study by Cambridge Associates titled “Manager Hiring and Firing,” which was highlighted in the CFA Institute report “Breaking the Short-Term Cycle.” Researchers analyzed 92 institutions and found that their decision to switch investment managers, often on the basis of short-term criteria, ultimately resulted in lower investment returns. [David L. Allison, Inside Investing]

It’s simpler than what most investing gurus make it out to be. It also serves as a good check as to whether a business is worth investigating further. To make things really easy, I have made the 3 rules of thumb I look for into a 3 x 3 matrix. [Jae Jun, Old School Value]

Funds

Baseball and the Stock Market

It is possible, one might say, that unusual stock performance could mirror better economic growth in any one year. High GDP growth (e.g., mid 1990’s) resulted in higher stock market returns on average in that period, but in 2013 the stock market took off with only minor GDP growth. It was right there. [Thomas Schneeweis, AllAboutAlpha.com]

Flow Chart: Do I need a Roth or a Regular IRA?

Connecticut-based financial advisor and portfolio manager Michael Lecours sent me this amazingly helpful flow chart he created to help people decide whether or not a regular IRA or Roth IRA would be a better move as they file their 2013 taxes. Keep in mind, the below is for informational purposes and does not constitute individualized advice, consult your financial advisor before making these types of decisions. [Michael, The Reformed Broker]

Hallador Energy Company – Security Analysis

American Energy! and Hallador Energy Co (NASDAQ:HNRG) – will be a foremost contender. Here are the 5 major reasons why HNRG is a superior energy company compared to its competitors. [Fat Pitch Investments]

How to tell if a merger rumor will come true

The most accurate kind of M&A reporter is “a reputable journalist who is older, who has a journalism degree, and who specializes in the industry of the target,” said Denis Sosyura, a professor at the University of Michigan’s Ross School of Business and an author of “Rumor Has It: Sensationalism in Financial Media.” [Craig Silverman, Quartz]

Lojack (LOJN) – Speculating on a step-change from Fleet

I’ve been watching LoJack Corporation (NASDAQ:LOJN) for a while, almost bought into it a couple of times but I’ve never been able to get comfortable until a few weeks ago. The irony is that if I had waited a bit longer, I could have gotten in at about 15% less. [Lsigurd, Reminiscences of a Stockblogger]

Here’s How to Unlock Africa’s Economic Potential

I laid out some reasons for this hope when I nominated the country as one of the “Next 11” emerging economies — countries with lots of people and untapped economic promise, capable of following the path cut by the BRIC nations (Brazil, Russia, India and China). More recently, I’ve drawn particular attention to four of the 11, the MINT countries: Mexico, Indonesia, Nigeria and Turkey. [Jim O’Neill, Bloomberg]

Time to Fire your Hedge Fund Managers?

Properly considering all potential risk factors through tradable liquid portfolios in the context of a risk based factor model is paramount to quantifying the benefits of investing in hedge funds. We attempt to span the space of potential risk factors with exchange traded funds (ETFs). [Brendan Conway, Focus on Funds]

Activism Monthly

This issue of Activism Monthly is focused on the proxy contest, which is appropriate, given the number of nomination deadlines that are rapidly approaching with every coming day. The period from March through June is often referred to as proxy season, especially in the USA, and we are likely to see activist investors filing solicitations and nomination letters at a frantic rate. [activistinsight.com]